US President-elect Donald Trump’s approach to cryptocurrencies is being replicated in Europe. If in the past Trump came to harshly attack bitcoin, the main cryptocurrency, he now advocates a policy favorable to them, with Republican officials in his environment advocating that the country’s Federal Reserve have reserves of the aforementioned token. On the other side of the Atlantic, there are politicians like Christian Lindnerformer German Minister of Finance and leader of the FDP, a German liberal party, who takes the baton.
From the Ministry of Finance, Lindner and his strong postulates against the increase in public spending were a continuous source of conflict between the partners of the government of Chancellor Olaf Scholz. The alliance between social democrats, greens and liberals was blown up precisely because of Lindner’s deep disagreements and that has led the country to federal elections in February in which the liberal leader wants to set his own tone in the face of polls that cast doubt on his training will achieve parliamentary representation.
It is in this context that the proposal made by Lindner is framed: that The European Central Bank (ECB) and its main ‘shareholder’, the German Bundesbank, have a bitcoin reserve. The liberal has justified this idea by pointing precisely to what is happening in the US. “The new Trump administration is carrying out an extremely progressive policy for crypto assets like bitcoin,” the electoral candidate has argued to the agency. DPA. “Washington is even considering whether the US Federal Reserve should include crypto assets in its reserve along with currencies and gold”
The ECB and the Bundesbank are independent in their decisions, Lindner stressed, “but Germany and Europe must not allow themselves to be left behind again. Frankfurt should therefore consider whether crypto assets should also be part of the reserves of the central banks”. This could also help strengthen the resistance of the reserves, defends the FDP leader. “After all, crypto assets now account for a significant proportion of global wealth growth,” he argues.
When asked about the risks that come with cryptocurrencies, whose prices fluctuate wildly Lindner has repeatedly pointed out these dangers: “No one would do well to invest everything in them. However, as a decentralized system in which no one has exclusive power, the political risks are calculable. And there are also fluctuations in traditional assets like precious metals.”
A couple of weeks ago, Lindner harshly attacked what, until a few weeks ago, was his Government, reproaching it for not having a more proactive attitude with cryptocurrencies. The head of the German liberals pointed out Scholz himself, the Minister of Economy, Robert Habeck, and the leader of the opposition, the head of the CDU, Friedrich Merz, for not taking advantage of the opportunities of bitcoin.
“I have not heard from the Federal Chancellor, the Minister of the Economy or the leader of the opposition that a new policy favorable to cryptocurrencies is being implemented in the US,” he complained. a Lindner who during his mandate as head of Finance did not deploy specific policies in defense of cryptocurrencies.
In his statement, Lindner mentioned an episode that has caused some controversy in Germany. A few months ago, authorities seized 50,000 bitcoin from a pirate firm, selling them when the token It was at $53,000. Taking into account that shortly after the cryptocurrency exceeded $100,000, the opportunity to earn billions was lost.
In a recent analysis, and focusing on the case of the United States, Ulrich Leuchtmann, chief currency analyst at Commerzbank, was critical of this idea that central banks have bitcoin reserves: “Within the existing logic of policy of reserves, it only makes sense if the US administration has an interest in artificially raise the price of bitcoin”.
“Republican Senator Cynthia Lummis (a vehement supporter of the idea) supposedly has owned bitcoin since 2013. So she certainly has an interest in rising prices. But why it should also be in the interest of the state is beyond me. Why would a State that has a monopoly on the issuance of means of payment and can thus generate seigniorage expose its own currency to a competing product?” continues the strategist,
“What if the United States abandoned the principle of not holding significant foreign exchange reserves? Then bitcoins would be the least suitable currency to accumulate reserves. Because American imports cannot be paid with bitcoin. Because almost nothing (except illegal transactions) can practically be paid with bitcoin. “Such reserves would be useless as insurance against times of crisis,” concludes Leuchtmann.
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